The Case for Good Jobs

“How can businesses thrive while their employees struggle to make ends meet? It’s time to challenge the way wages are defined and redefine business success.”

1. Competitive Market Wages Are Often Insufficient

The idea of a "competitive market wage" is commonly seen as fair and just. Yet, for many workers, these wages fail to provide even a basic standard of living. This issue becomes especially striking when examined in high-profile industries like technology.

Take PayPal as an example. Despite being a leader in financial services, an internal review revealed something troubling: many of its employees were living paycheck-to-paycheck. Some even relied on soup kitchens to feed their families. This exposed the pitfalls of equating market wages with fairness and adequacy.

Competitive wages may reflect the supply and demand for labor in theory, but they often fall short when matched against real-world living costs. Employees not making enough to cover rent, healthcare, and basic necessities suggests that the market fails to account for human realities. This discrepancy highlights a major oversight in wage-setting that spans industries.

Examples

• PayPal employees struggled with food insecurity despite working for a leading tech firm.
• Gig workers often face low pay that doesn’t reflect the effort and time they invest.
• Retail and service industry employees frequently report challenges in meeting monthly bills.

2. Financial Well-being Impacts Job Quality

When employees are financially insecure, their productivity and satisfaction often decline. It’s not just about paychecks; it's about how financial well-being shapes their day-to-day experiences and job performance.

PayPal decided to combat this by launching a financial wellness initiative. The goal was to raise employees' net disposable income by 20%, combining higher wages with reduced healthcare costs. This acknowledgment of financial strain was both a bold move and an ethical one, sending a signal that companies should consider more than just profits.

The financial strain impacts mental and physical health, leading to stress, absenteeism, and turnover. Addressing these factors directly, as PayPal did, can ripple outward, improving customer service, reputation, and profitability for companies that invest in their workforce.

Examples

• Pay raises at PayPal paired with lower healthcare contributions reduced financial stress.
• Workers in better financial health report being more engaged and focused at work.
• Companies that prioritize worker finances often see lower turnover rates.

3. Good Wages Benefit Businesses Too

Paying workers fairly isn’t just about ethics; it’s good business. Well-compensated employees are loyal and motivated, which leads to higher productivity and better outcomes for the company.

When PayPal increased wages and reduced costs for employees, it wasn’t charity—it was an investment. Happy, secure workers make better decisions, innovate more, and deliver an improved customer experience. Employees who feel valued also spread positive word of mouth about their workplace.

This strategy creates a sustainable cycle. Businesses that compensate employees well perform better, which generates more resources to reinvest in their teams. This virtuous cycle is far removed from the race-to-the-bottom mentality where cutting costs undermines long-term success.

Examples

• Studies show that higher wages lead to higher sales and customer loyalty.
• Companies with consistent wage policies often see fewer workplace disputes.
• Firms like Costco have proved that paying above-market wages leads to better retention.

4. Market-Driven Wages Miss the Big Picture

If wages adhere strictly to market norms, they don’t account for differing costs of living or individual needs. This approach assumes all regions and workers function within similar economic systems, which isn’t true.

The “one size fits all” approach to wages hurt employees who live in areas with a high cost of living. It perpetuates inequality by pushing lower-income workers into survival mode, where they can’t pursue professional or personal development. Businesses suffer when their employees struggle.

The PayPal example demonstrates that altering this viewpoint—looking at workers holistically—can change everything. Moving beyond market-driven wages means rethinking labor as a human-centered resource that thrives with support, not just a theoretical cost.

Examples

• Many large cities show higher poverty rates despite increased job availability.
• Companies using regional pay adjustments often report happier employees.
• Investing in localized supports, such as subsidized housing, can boost morale.

5. Breaking the Cycle of Financial Precarity

When workers fail to meet their basic needs, they often become trapped in a cycle of financial instability. Businesses accustomed to these patterns of low pay perpetuate a system that harms both humanity and productivity.

PayPal broke the mold, signaling that corporate responsibility includes solving worker insecurity. This shift pushes back against the idea that only employees are accountable for their well-being. Instead, it makes employers part of the solution.

Workers staying in survival mode cannot innovate or contribute effectively. They focus only on making ends meet. Re-imagining wages as part of a comprehensive strategy to support employees breaks this destructive cycle.

Examples

• PayPal’s internal efforts improved income and eliminated reliance on soup kitchens.
• CEOs like Dan Price of Gravity Payments advocate raising base pay across industries.
• Federal policies in several countries now focus on living wages over minimum wage standards.

6. A Holistic Approach to Employee Well-being

Financial wellness alone isn’t enough; businesses must consider a broader approach to worker happiness, meaning job security, ongoing career opportunities, and respectful treatment.

A “good jobs system” includes elements beyond just financial aid. It creates roles that people find fulfilling, with predictable hours and clear paths of career growth. Companies investing in job quality find that workers are not only happier but also more willing to invest their time and energy into organizational goals.

At its core, this approach is about seeing employees as human beings rather than mere cogs. When workers thrive personally, they drive the company toward lasting success.

Examples

• Firms with mentorship programs experience higher internal promotions.
• Companies restructuring their job roles for flexibility see fewer absences.
• Studies show growth opportunities result in increased employee loyalty.

7. Wage Transparency Builds Trust

Employees want to feel like their contributions are valued. Transparent wage policies ensure that trust is built from the start.

Disclosing how wages are calculated—and why certain pay tiers exist—helps workers understand fairness. PayPal, for instance, tied increases in wage transparency to worker satisfaction, which fostered a sense of inclusion and fairness throughout its workforce.

Without transparency, workers may perceive disparities even when none exist. Clear guidelines address any doubts, reduce conflict, and boost organizational culture overall.

Examples

• Companies publishing salary ranges report fewer hiring delays.
• Transparent pay systems reduce employee turnover by clarifying expectations.
• Workers knowing salary details ahead of negotiation report higher job enthusiasm.

8. Customer Satisfaction Ties Directly to Employee Pay

Financial insecurity doesn’t just affect employees—it ripples out to customers as well. A stressed, unhappy worker isn’t likely to deliver the best possible experience.

PayPal’s service quality improved when employees no longer worried about meeting basic needs. Happy employees treated customers better, meeting them with patience and care, which improved the company’s public perception as well as customer loyalty.

This dynamic showcases how addressing wage and financial concerns isn’t just about retention; it's about maintaining a competitive edge.

Examples

• Underpaid retail workers often lead to lower customer satisfaction scores.
• Higher-paid customer service reps generally resolve issues faster in tech firms.
• Treating staff well attracted loyal clientele for brands like Costco and Trader Joe’s.

9. Aligning Wages with Dignity

Finally, wages should align with respect for human dignity, reflecting the value of the individual rather than just their output.

A business that values employees fosters loyalty, innovation, and better long-term outcomes. By rethinking wages as an ethical commitment rather than a market norm, companies pave their way to success while improving society.

The alignment between fair wages and human dignity is transformative. It infuses work with purpose, shifts business perspectives, and ensures sustainable growth.

Examples

• Firms that increase wages often find unexpected boosts to morale and creativity.
• Ethical brands like Patagonia prioritize fair wages to demonstrate responsibility.
• Workers treated as assets rather than costs often outperform benchmarks.

Takeaways

1. Reassess your company’s wage structures to ensure they meet the real-life needs of your employees, considering local living costs.
2. Extend the idea of wellness beyond paychecks by investing in predictable schedules and professional opportunities for your workforce.
3. Build trust with transparent wage policies and emphasize the ethical commitment to your employees' dignity in company decisions.